- Drop in quarterly gross domestic product comes as 1.43m people file for unemployment benefits, a second week of increases, amid Covid-19 pandemic
The US economy shrank by an annual rate of 32.9% between April and June, its sharpest contraction since the second world war, government figures revealed on Thursday, as more signs emerged of the coronavirus pandemic’s heavy toll on the country’s economy.
The record-setting quarterly fall in economic growth compared to the same time last year came as another 1.43 million Americans filed for unemployment benefits last week, a second week of rises after a four-month decline.
The annualized figure is the largest drop in quarterly gross domestic product (GDP) – the broadest measure of the economy – since records began in 1945. Economists expect the rate to improve sharply later this year but the outlook has been clouded by the recent rise in infections across the US.
The news came as Germany, Europe’s largest economy, also recorded a dramatic slump in economic growth, contracting by 10.1% between April and June, the biggest decline since 1970. The news triggered a sell-off in US and European markets.